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4mo ago

Nvidia Poised for 66% Q1 Revenue Gain Despite China Restrictions Impact

A $5.5 billion write-down on H20 inventory blocked from China is expected to shrink Nvidia’s profit margins

The Nvidia logo and U.S. and Chinese flags are seen in this illustration taken on January 29, 2025. REUTERS/Dado Ruvic/Illustration/File Photo
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Overview

  • Analysts forecast that Nvidia will report $43.26 billion in first-quarter revenue, a 66% increase year-over-year driven largely by its Data Center segment.
  • New U.S. export restrictions on the H20 AI chip have forced Nvidia to take a $5.5 billion inventory charge and require licensing for future China shipments.
  • Nvidia’s market share in China has declined from 95% to about 50%, prompting development of a lower-cost AI chip slated for production by September.
  • Deals in the Middle East, including Oracle’s $40 billion order for OpenAI data centers and a contract with Saudi-backed Humain, are strengthening geographic diversification.
  • Gross margin projections for Q1 range from the high-60s to as low as 58%, but analysts maintain positive long-term outlooks based on continued AI infrastructure demand.